We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Cfs Bancorp, Inc. (MM) | NASDAQ:CITZ | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 12.35 | 0 | 00:00:00 |
From Dec 2019 to Dec 2024
Financial results for the quarter include:
Chief Executive Officer's Comments
"As previously announced in May, we are excited about our pending merger with First Merchants Corporation headquartered in Muncie, Indiana," said Daryl D. Pomranke, Chief Executive Officer. "The size of the First Merchants organization will allow both companies to provide better value to our communities, clients, shareholders, and employees, and allow us to offer expanded products and services to our clients, including insurance and wealth management, along with more banking centers and ATMs. Our companies are similar with deep roots in community banking and both are committed to local delivery of exceptional service. We are planning on the merger being completed during the fourth quarter of this year, assuming we receive the required shareholder and bank regulatory approvals."
"While we remain focused on improving profitability, we are disappointed that our quarterly results were impacted by higher credit-related costs including an increased provision for loan losses and a large loss on the sale of one other real estate owned property," added Pomranke. "The required provision for loan losses during the quarter was primarily due to a $2.8 million specific reserve established on a performing and current $13.1 million commercial real estate non-owner occupied loan, which was deemed a troubled debt restructuring during the quarter."
Update on Strategic Growth and Diversification Plan
Our ratio of non-performing loans to total loans increased to 4.04% at June 30, 2013 from 3.77% at March 31, 2013. The increase in the second quarter of 2013 was primarily due to the transfer to non-accrual status of one commercial real estate owner occupied and one commercial and industrial participation troubled debt restructuring totaling $1.1 million and $1.2 million, respectively, combined with two commercial real estate non-owner occupied relationships totaling $802,000, and one multifamily relationship totaling $594,000. These increases were partially offset by gross loan charge-offs totaling $1.6 million and repayments and payoffs totaling $1.1 million. Also, the decrease in total loan balances during the second quarter of 2013 contributed to the increase in the ratio of non-performing loans to total loans. The ratio of non-performing assets to total assets was relatively stable at 4.29% at June 30, 2013 compared to 4.25% at March 31, 2013 and decreased from 6.28% at June 30, 2012. See the "Asset Quality" table in this press release for more detailed information.
Non-interest expense increased to $9.5 million for the second quarter of 2013 from $8.5 million for the first quarter of 2013 and the second quarter of 2012 primarily due to increased professional fees from legal and investment banking fees related to the merger. See the "Non-Interest Income and Non-Interest Expense" section in this press release for more detailed information.
We continue to target specific segments in our loan portfolio for growth, including commercial and industrial, owner occupied commercial real estate, and multifamily, which, in the aggregate, comprised 60.3% of the commercial loan portfolio at June 30, 2013, compared to 59.3% at March 31, 2013 and 55.6% at June 30, 2012. Our focus on deepening client relationships emphasizes growth in core deposits. Total core deposits at June 30, 2013 increased to 68.3% of total deposits compared to 66.8% at March 31, 2013 and 62.5% at June 30, 2012, primarily due to an increase in non-interest bearing accounts and the continued shrinkage in certificates of deposit in this low interest rate environment.
Pre-Tax, Pre-Provision Earnings, As Adjusted(1)
Pre-tax, pre-provision earnings, as adjusted, decreased to $2.3 million for the second quarter of 2013 compared to $2.8 million for the first quarter of 2013 and $3.1 million for the second quarter of 2012. The decreases were primarily related to lower gains on the sales of loans held for sale combined with decreases in net interest income due to lower loan balances and our increased level of liquidity. A modest increase in deposit related service fees during 2013 partially offset the aforementioned decreases.
(1) A schedule reconciling earnings in accordance with U.S. generally accepted accounting principles (GAAP) to the non-GAAP measurement of pre-tax, pre-provision earnings, as adjusted, is provided on the last page of the attached tables.
Net Interest Income and Net Interest Margin
Hot Features
Premium
Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2013 2013 2012
----------- ----------- -----------
(Dollars in thousands)
Net interest margin 3.21% 3.23% 3.42%
Interest rate spread 3.15 3.17 3.35
Net interest income $ 8,233 $ 8,201 $ 8,944
Average assets:
Yield on interest-earning assets 3.65% 3.71% 4.03%
Yield on loans receivable 4.53 4.62 4.70
Yield on investment securities 2.78 2.78 3.42
Average interest-earning assets $ 1,027,146 $ 1,030,232 $ 1,052,039
Average liabilities:
Cost of interest-bearing liabilities .50% .54% .68%
Cost of interest-bearing deposits .39 .44 .58
Cost of borrowed funds 2.28 2.26 2.30
Average interest-bearing liabilities $ 902,564 $ 908,356 $ 941,398
The net interest margin was relatively flat at 3.21% for the second quarter of 2013 compared to 3.23% for the first quarter of 2013 and decreased 21 basis points compared to the second quarter of 2012. Net interest income was stable at $8.2 million for the second quarter of 2013 compared to $8.2 million for the first quarter of 2013 and decreased from $8.9 million for the second quarter of 2012, primarily due to lower interest income on loans and investment securities. The net interest margin was negatively impacted by loans comprising a smaller proportion of interest-earning assets and the Bank having a higher level of liquidity. Management believes that higher levels of liquidity, modest loan demand, reduced but still elevated level of non-performing assets, the continued low interest rate environment, and significant narrowing of spreads available on new investment securities purchases will continue to pressure our net interest margin for the foreseeable future. The second quarter 2013 decrease in yields on investment securities compared to the fourth quarter of 2012 was primarily related to prepayments, maturities, and sales of higher-yielding investment securities with the proceeds reinvested at lower rates. The level of non-performing loans continues to negatively affect the yield on loans receivable. Also, the net interest margin was positively affected during the second quarter of 2013 by a four basis point decrease in the cost of interest-bearing liabilities from the first quarter of 2013 and an 18 basis point decrease compared to the second quarter of 2012.
Interest income totaled $9.3 million for the second quarter of 2013, essentially flat compared to $9.4 million for the first quarter of 2013 and an 11.3% decrease from $10.5 million for the second quarter of 2012. The decrease is primarily related to the reinvestment of proceeds from sales and maturities of investment securities in lower-yielding investments, lower loan balances, and maintaining higher levels of short-term liquid investments due to the lack of suitable higher-yielding investment alternatives in the current low interest rate environment combined with modest loan demand.
Interest expense decreased 8.4% to $1.1 million for the second quarter of 2013 compared to $1.2 million for the first quarter of 2013 and 29.8% from $1.6 million for the second quarter of 2012. Our continuing success in increasing the proportion of low-cost core deposits to total deposits and continued disciplined pricing on new and renewing certificates of deposit contributed to the decreases in interest expense during the second quarter of 2013.
Non-Interest Income and Non-Interest Expense
Non-interest income decreased $1.0 million, or 36.7%, to $1.8 million for the second quarter of 2013 compared to the first quarter of 2013 primarily due to decreases of $552,000 in gains on sales of other real estate owned from the sale of a property held after the foreclosure of a participation loan, $357,000 in gains on sales of loans receivable due to lower gain on sale margins and more aggressive competitor pricing as mortgages rates increased during the quarter, and $196,000 in income from bank-owned life insurance due to the first quarter of 2013 death of an insured which resulted in income of $218,000 during that quarter. These decreases were partially offset by an increase of $128,000 in deposit related fees as a result of an increase in the Bank's fee structure related to daily overdraft charges.
Non-interest income of $1.8 million for the second quarter of 2013 decreased $837,000, or 31.7%, from $2.6 million for the second quarter of 2012 primarily due to decreases in net gains on sale of other real estate owned of $628,000, $113,000 in net gains on the sale of investment securities, and $94,000 in net gains on loans held for sale. These variances were partially offset by an increase in deposit related fees totaling $70,000.
Non-interest expense for the second quarter of 2013 increased $1.0 million, or 11.9%, to $9.5 million from $8.5 million for the first quarter of 2013. The increase was primarily due to a $813,000 increase in professional fees from merger-related expenses and a $115,000 increase in loan collection expense related to increased work-out costs. Other real estate owned expense decreased $136,000 due to lower writedowns on the net realizable value of the properties held combined with higher rental income from one of our larger non-owner occupied properties.
Non-interest expense during the second quarter of 2013 increased $922,000, or 10.8%, to $9.5 million from $8.5 million for the second quarter of 2012 primarily due to a $943,000 increase in professional fees from merger-related expenses and a $129,000 increase in loan collection costs. These increases were partially offset by a $202,000 decrease in other real estate owned expense due to lower writedowns on the net realizable value of the properties held combined with higher rental income from one of our larger non-owner occupied properties.
Income Tax Expense
During the second quarter of 2013, we recorded an income tax benefit of $334,000 as a result of our pre-tax loss. During the first quarter of 2013, we recorded income tax expense of $588,000, or an effective tax rate of 28.1%. During the second quarter of 2012, we recorded income tax expense of $541,000, or an effective tax rate of 28.5%.
Asset Quality
June 30, March 31, June 30,
2013 2013 2012
----------- ----------- -----------
(Dollars in thousands)
Non-performing loans (NPLs) $ 26,674 $ 25,048 $ 51,850
Other real estate owned 21,878 23,698 19,223
----------- ----------- -----------
Non-performing assets (NPAs) $ 48,552 $ 48,746 $ 71,073
=========== =========== ===========
Allowance for loan losses (ALL) $ 12,660 $ 12,024 $ 12,062
Provision for loan losses for the
quarter ended 1,076 510 1,150
Loan charge-offs (recoveries):
Gross loan charge-offs $ 1,569 $ 878 $ 892
Recoveries (1,129) (207) (36)
----------- ----------- -----------
Net charge-offs for the quarter ended $ 440 $ 671 $ 856
=========== =========== ===========
NPLs / total loans 4.04% 3.77% 7.27%
NPAs / total assets 4.29 4.25 6.28
ALL / total loans 1.92 1.81 1.69
ALL / NPLs 47.46 48.00 23.26
Total non-performing loans increased $1.6 million, or 6.5%, to $26.7 million at June 30, 2013 from $25.0 million at March 31, 2013 and decreased $25.2 million, or 48.6%, from $51.9 million at June 30, 2012. The increase in the second quarter of 2013 was primarily due to the transfer to non-accrual status of one commercial real estate owner occupied and one commercial and industrial participation troubled debt restructuring totaling $1.1 million and $1.2 million, respectively, combined with two commercial real estate non-owner occupied relationships totaling $802,000, and one multifamily relationship totaling $594,000. These increases were partially offset by gross charge-offs totaling $1.6 million and repayments and payoffs totaling $1.1 million. Of the total loans classified as non-performing at June 30, 2013, $7.3 million, or 27.2%, are current and performing in accordance with their loan agreements. The ratio of non-performing loans to total loans increased to 4.04% at June 30, 2013 from 3.77% at March 31, 2013 and decreased from 7.27% at June 30, 2012.
The provision for loan losses increased to $1.1 million for the second quarter of 2013 compared to $510,000 for the first quarter of 2013 and $1.2 million for the second quarter of 2012. The increase during the second quarter of 2013 was primarily related to a $2.8 million specific reserve established for a $13.1 million commercial real estate non-owner occupied loan deemed a troubled debt restructuring. This loan is current and paying in accordance with the terms and conditions of its agreement. The provision was also positively impacted by a $967,000 repayment of a previously recognized charge-off related to a commercial participation loan.
The ratio of the allowance for loan losses to total loans increased to 1.92% at June 30, 2013 from 1.81% at March 31, 2013 and 1.69% at June 30, 2012. When it is determined that a non-performing collateral-dependent loan has a collateral shortfall, management immediately charges-off the collateral shortfall. As a result, we are not required to maintain an allowance for loan losses on these loans as the loan balance has already been written down to its net realizable value (fair value less estimated costs to sell the collateral). As such, the ratio of the allowance for loan losses to total loans and the ratio of the allowance for loan losses to non-performing loans has continued to be negatively affected by cumulative partial charge-offs of $4.9 million recorded through June 30, 2013 on $7.3 million (net of charge-offs) of non-performing collateral dependent loans. At June 30, 2013, the ratio of the allowance for loan losses to non-performing loans excluding the $7.3 million of non-performing collateral dependent loans with partial charge-offs decreased to 65.2% compared to 76.9% at March 31, 2013 and increased from 62.8% at June 30, 2012 due to a lower amount of non-performing collateral dependent loans with partial charge-offs remaining in the Bank's portfolio.
During the second quarter of 2013, we transferred one retail loan relationship totaling $115,000 to other real estate owned and sold ten other real estate owned properties aggregating $1.7 million resulting in net losses on the sales of $542,000, including the cash sale of one large commercial participation property that was sold at a deep discount to appraised value by the participant bank resulting in a $529,000 loss on sale. We continue to explore ways to reduce our overall exposure in our non-performing assets through various alternatives, including using A/B-Note structures and the potential sale of certain of these assets. We currently have contracts for the sale of certain other real estate owned properties which will reduce non-performing assets by approximately $2.0 million once completed, presuming the transactions close as scheduled and pursuant to the contract terms. We are also aware of two borrowers with non-accrual loans aggregating $3.3 million that have contracts related to the sale of the underlying collateral, which if consummated, will provide funds to repay their loans.
Statement of Condition Highlights
The table below provides a summary of the more significant items in our statement of condition as of the dates indicated.
June 30, March 31, June 30,
2013 2013 2012
----------- ----------- -----------
(Dollars in thousands)
Assets:
Total assets $ 1,131,548 $ 1,146,368 $ 1,132,094
Interest-earning deposits with banks 132,929 133,766 51,687
Investment securities 232,915 235,177 240,590
Loans receivable, net of unearned fees 660,072 664,308 713,596
Liabilities and Equity:
Total liabilities $ 1,020,336 $ 1,033,591 $ 1,027,497
Deposits 961,945 974,328 967,154
Borrowed funds 49,306 49,828 51,306
Shareholders' equity 111,212 112,777 104,597
Loans Receivable
June 30, March 31, June 30,
2013 2013 2012
--------------- --------------- ---------------
% of % of % of
Amount Total Amount Total Amount Total
-------- ----- -------- ----- -------- -----
(Dollars in thousands)
Commercial loans:
Commercial and
industrial $ 95,675 14.5% $ 91,649 13.8% $ 89,479 12.6%
Commercial real estate
- owner occupied 97,906 14.8 99,030 14.9 102,149 14.3
Commercial real estate
- non-owner occupied 157,517 23.9 159,414 24.0 184,284 25.8
Commercial real estate
- multifamily 72,806 11.0 71,630 10.8 76,647 10.7
Commercial construction
and land development 14,166 2.1 15,335 2.3 23,353 3.3
Commercial
participations 3,661 .6 5,137 .8 6,453 .9
-------- ----- -------- ----- -------- -----
Total commercial
loans 441,731 66.9 442,195 66.6 482,365 67.6
Retail loans:
One-to-four family
residential 170,879 25.9 172,540 25.9 177,830 24.9
Home equity lines of
credit 44,026 6.7 45,616 6.9 49,476 6.9
Retail construction and
land development 913 .1 1,370 .2 1,518 .2
Other 3,232 .5 3,025 .5 2,724 .5
-------- ----- -------- ----- -------- -----
Total retail loans 219,050 33.2 222,551 33.5 231,548 32.5
-------- ----- -------- ----- -------- -----
Total loans
receivable 660,781 100.1 664,746 100.1 713,913 100.1
Net deferred loan
fees (709) (.1) (438) (.1) (317) (.1)
-------- ----- -------- ----- -------- -----
Total loans
receivable, net
of unearned fees $660,072 100.0% $664,308 100.0% $713,596 100.0%
======== ===== ======== ===== ======== =====
Total loans receivable decreased $4.2 million, or .6%, at June 30, 2013 from March 31, 2013 and $53.5 million, or 7.5%, from June 30, 2012. The second quarter decrease was due to repayments totaling $19.0 million, sales of one-to-four family loans totaling $13.2 million, transfers to other real estate owned totaling $115,000, and gross charge-offs totaling $1.6 million. Partially offsetting these decreases, loan fundings during the second quarter of 2013 totaled $29.7 million, which more than doubled from fundings for the first quarter of 2013 totaling $12.8 million. The increase in loan fundings from the first quarter of 2013 is primarily related to higher demand for commercial real estate multifamily loans and an increase in commercial clients utilizing lines of credit. Fundings for the second quarter of 2013 were more in line with fundings of $31.3 million, or a decrease of 4.9%, from the second quarter of 2012.
At June 30, 2013, our total commercial loans outstanding that were originated prior to January 1, 2008 (Pre-1/1/08) decreased to $135.4 million, or 30.7% of total commercial loans outstanding, compared to $139.8 million, or 31.6%, at March 31, 2013 and $187.9 million, or 38.9%, at June 30, 2012. The Pre-1/1/08 portfolio has had a significantly higher percentage of non-performing loans and has accounted for 91.3% of all commercial loan charge-offs since January 1, 2008. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2012 for more detailed discussions of our Pre-1/1/08 commercial portfolio.
During the second quarter of 2013, we sold $13.2 million of conforming one-to-four family fixed-rate mortgage loans into the secondary market and recorded gains on the sales of $106,000 compared to loan sales and gains on the sales of $11.7 million and $463,000, respectively, in the first quarter of 2013 and $11.0 million and $200,000, respectively, in the second quarter of 2012. The decrease in the net gains realized during the second quarter of 2013 was primarily a result of lower gain on sale margins due to more aggressive pricing from competitors as mortgage rates rose during the quarter and a smaller pipeline of outstanding mortgage commitments at June 30, 2013 compared to March 31, 2013.
Deposits
June 30, March 31, June 30,
2013 2013 2012
--------------- --------------- ---------------
% of % of % of
Amount Total Amount Total Amount Total
--------- ----- --------- ----- --------- -----
(Dollars in thousands)
Checking accounts:
Non-interest bearing $ 110,724 11.5% $ 114,897 11.8% $ 97,435 10.1%
Interest-bearing 202,399 21.0 192,051 19.7 179,842 18.5
Money market accounts 181,484 18.9 183,766 18.9 182,522 18.9
Savings accounts 162,707 16.9 159,633 16.4 144,705 15.0
--------- ----- --------- ----- --------- -----
Core deposits 657,314 68.3 650,347 66.8 604,504 62.5
Certificates of deposit
accounts 304,631 31.7 323,981 33.2 362,650 37.5
--------- ----- --------- ----- --------- -----
Total deposits $ 961,945 100.0% $ 974,328 100.0% $ 967,154 100.0%
========= ===== ========= ===== ========= =====
Since the implementation of our High Performance Checking (HPC) deposit acquisition marketing program that targets both retail and business clients, we have seen a significant increase in core deposits. The program is designed to attract a younger demographic and enhance growth in the number of checking accounts, core deposits, and related fee income as well as to provide additional cross-selling opportunities. In addition, core deposits continue to benefit from clients moving maturing certificates of deposit into money market and savings accounts due to the current low interest rate environment.
Borrowed Funds
June 30, March 31, June 30,
2013 2013 2012
----------- ----------- -----------
(Dollars in thousands)
Short-term variable-rate repurchase
agreements $ 9,903 $ 10,377 $ 11,540
FHLB advances 39,403 39,451 39,766
----------- ----------- -----------
Total borrowed funds $ 49,306 $ 49,828 $ 51,306
=========== =========== ===========
Borrowed funds decreased during the second quarter of 2013 primarily due to levels of repurchase agreements which tend to fluctuate depending on our clients' liquidity needs combined with repayments of our amortizing FHLB advances.
Shareholders' Equity
Shareholders' equity at June 30, 2013 decreased slightly to $111.2 million, or 9.83% of assets, from $112.8 million, or 9.84% of assets, at March 31, 2013 and increased from $104.6 million, or 9.24% of assets, at June 30, 2012. The decrease from March 31, 2013 was primarily due to our net loss of $167,000 and was partially offset by a decrease in accumulated other comprehensive income, net of tax, of $1.5 million and dividends declared of $109,000.
At June 30, 2013, the Bank's Tier 1 capital ratio increased 16 basis points to 9.08% from 8.92% at March 31, 2013 and 52 basis points from 8.56% at June 30, 2012. The Bank's total capital to risk-weighted assets ratio increased 45 basis points to 15.31% from 14.86% at March 31, 2013 and 196 basis points from 13.35% at June 30, 2012. The increases in the capital ratios are primarily related to the increase in shareholders' equity combined with a decrease in risk-based assets. At June 30, 2013, the Bank was deemed to be "well capitalized" and in excess of the individual minimum capital requirements set by the OCC in December 2012 of 8% for Tier 1 capital and 12% for total risk-based capital to risk-weighted assets.
Pending Merger
In a joint press release dated May 13, 2013, First Merchants Corporation (First Merchants) and CFS Bancorp, Inc. (CFS) announced First Merchants' intent to acquire CFS in an all-stock transaction. Under the terms of the merger agreement, CFS shareholders will have the right to receive .65 shares of First Merchants common stock for each share of CFS common stock held by them. The transaction is expected to close in the fourth quarter of 2013, subject to approval by CFS and First Merchants shareholders, regulatory approvals, and the satisfaction of customary conditions provided in the merger agreement. Please see our Current Report on Form 8-K filed on May 13, 2013 with the SEC for more information regarding the merger.
Company Profile
CFS Bancorp, Inc. is the parent of Citizens Financial Bank, a $1.1 billion asset federal savings bank. Citizens Financial Bank is an independent bank focusing its people, products, and services on helping individuals, businesses, and communities to be successful. We have 20 full-service banking centers throughout adjoining markets in Chicago's Southwest suburbs and Northwest Indiana. Our website can be found at www.citz.com.
Additional Information
The proposed merger will be submitted to First Merchants' and CFS' shareholders for their consideration. In connection with the proposed merger, First Merchants has filed with the SEC a Preliminary Registration Statement on Form S-4 that includes a Joint Proxy Statement for First Merchants and CFS and a Prospectus of First Merchants, as well as other relevant documents concerning the proposed transaction. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE CORRESPONDING PROXY STATEMENT AND PROSPECTUS REGARDING THE MERGER WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, TOGETHER WITH ALL AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY ALL CONTAIN IMPORTANT INFORMATION. Once filed, you may obtain a free copy of the Proxy Statement and Prospectus, when they become available, as well as other filings containing information about First Merchants and CFS, at the SEC's web site (http://www.sec.gov). You may also obtain these documents, free of charge, by accessing First Merchants' web site (http://www.firstmerchants.com) under the tab "Investors," then under the heading "Financial Information," and finally under the link "SEC Filings," or by accessing CFS' web site (http://www.mybankcitizens.com) under the "Investor Relations" tab, then under the "Financial Documents" tab, and finally under the link "SEC Filings."
First Merchants and CFS and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Merchants and CFS in connection with the proposed merger. INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE OFFICERS OF FIRST MERCHANTS IS SET FORTH IN THE DEFINITIVE PROXY STATEMENT FOR FIRST MERCHANTS' 2013 ANNUAL MEETING OF SHAREHOLDERS FILED WITH THE SEC ON MARCH 29, 2013 AND FIRST MERCHANTS' ANNUAL REPORT ON FORM 10-K FILED ON MARCH 15, 2013. INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE OFFICERS OF CFS IS SET FORTH IN THE DEFINITIVE PROXY STATEMENT FOR CFS' 2013 ANNUAL MEETING OF SHAREHOLDERS FILED WITH THE SEC ON APRIL 2, 2013. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement and Prospectus regarding the proposed merger when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.
Forward-Looking Information
This press release contains forward-looking statements and information related to us that is based on our beliefs as well as assumptions made by and currently available to us and are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our ability to successfully execute our strategy and Strategic Growth and Diversification Plan, the level and sufficiency of the Bank's current regulatory capital and equity ratios, our ability to continue to diversify the loan portfolio, our efforts at deepening client relationships, increasing levels of core deposits, lowering non-performing asset levels, managing and reducing credit-related costs, increasing revenue growth and levels of earning assets, the effects of general economic and competitive conditions nationally and within our core market area, the ability to sell other real estate owned properties and mortgage loans held for sale, the sufficiency of the levels of provision for and the allowance for loan losses, amounts of charge-offs, levels of loan and deposit growth, interest on loans, asset yields and cost of funds, net interest income, net interest margin, non-interest income, non-interest expense, the interest rate environment, and other risk factors identified in the filings we make with the SEC. In addition, these forward-looking statements include, but are not limited to, statements relating to the benefits of the proposed merger between First Merchants and CFS, including future financial and operating results, and are subject to significant risks, assumptions, and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: the risk that the businesses of First Merchants and CFS will not be integrated successfully or such integration may be more difficult, time-consuming, or costly than expected; expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; revenues following the merger may be lower than expected; client and employee relationships and business operations may be disrupted by the merger; the ability to obtain required governmental and shareholder approvals; and the ability to complete the merger on the expected timeframe. The words "anticipate," "believe," "estimate," "expect," "indicate," "intend," "intend to," "plan," "project," "should," "will," "would be," or similar expressions, or the negative thereof, as well as statements that include future events, tense, or dates, or that are not historical or current facts, as they relate to us, our business, prospects, or our management, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties, assumptions, and changes in circumstances, and you should not place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are not guarantees of future performance or outcomes, and actual results or events may differ materially from those included in these statements, including whether the merger is effectuated or not. CFS does not intend to update these forward-looking statements unless required to under federal securities law.
CFS BANCORP, INC.
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
------------------------------------ -----------------------
June 30, March 31, June 30, June 30, June 30,
2013 2013 2012 2013 2012
----------- ----------- ----------- ----------- -----------
Interest
income:
Loans
receivable $ 7,495 $ 7,700 $ 8,243 $ 15,195 $ 16,629
Investment
securities 1,731 1,593 2,186 3,324 4,316
Other
interest-
earning
assets 121 124 103 245 196
----------- ----------- ----------- ----------- -----------
Total
interest
income 9,347 9,417 10,532 18,764 21,141
Interest
expense:
Deposits 828 931 1,294 1,759 2,684
Borrowed
funds 286 285 294 571 590
----------- ----------- ----------- ----------- -----------
Total
interest
expense 1,114 1,216 1,588 2,330 3,274
----------- ----------- ----------- ----------- -----------
Net interest
income 8,233 8,201 8,944 16,434 17,867
Provision for
loan losses 1,076 510 1,150 1,586 2,200
----------- ----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 7,157 7,691 7,794 14,848 15,667
Non-interest
income:
Deposit
related fees 1,648 1,520 1,578 3,168 3,047
Net gain
(loss) on
sale of:
Investment
securities 192 184 305 376 723
Loans held
for sale 106 463 200 569 359
Other real
estate
owned (542) 10 86 (532) 39
Income from
bank-owned
life
insurance 134 330 162 464 702
Other income 268 347 312 615 597
----------- ----------- ----------- ----------- -----------
Total non-
interest
income 1,806 2,854 2,643 4,660 5,467
Non-interest
expense:
Compensation
and employee
benefits 4,418 4,370 4,467 8,788 9,180
Professional
fees 1,141 328 198 1,469 451
Net occupancy
expense 625 694 679 1,319 1,387
Data
processing 544 513 445 1,057 883
FDIC
insurance
premiums and
regulatory
assessments 479 481 490 960 978
Furniture and
equipment
expense 398 403 468 801 925
Marketing 315 269 322 584 726
Other real
estate owned
related
expense, net 114 250 316 364 934
Loan
collection
expense 248 133 119 381 237
Severance and
retirement
compensation
expense -- -- -- -- 876
Other general
and
administrative
expenses 1,182 1,014 1,038 2,196 2,172
----------- ----------- ----------- ----------- -----------
Total non-
interest
expense 9,464 8,455 8,542 17,919 18,749
----------- ----------- ----------- ----------- -----------
Income (loss)
before income
taxes (501) 2,090 1,895 1,589 2,385
Income tax
expense
(benefit) (334) 588 541 254 541
----------- ----------- ----------- ----------- -----------
Net income
(loss) $ (167) $ 1,502 $ 1,354 $ 1,335 $ 1,844
=========== =========== =========== =========== ===========
Basic earnings
(loss) per
share $ (.02) $ .14 $ .13 $ .12 $ .17
Diluted
earnings
(loss) per
share (.02) .14 .13 .12 .17
Weighted-
average common
and common
share
equivalents
outstanding:
Basic 10,790,267 10,739,160 10,750,313 10,764,855 10,724,103
Diluted 10,869,069 10,810,800 10,806,555 10,840,096 10,776,476
CFS BANCORP, INC.
Consolidated Statements of Condition (Unaudited)
(Dollars in thousands)
June 30, March 31, December 31, June 30,
2013 2013 2012 2012
------------ ------------ ------------ ------------
ASSETS
Cash and amounts due
from depository
institutions $ 16,697 $ 20,474 $ 20,577 $ 33,846
Interest-earning
deposits with banks 132,929 133,766 114,122 51,687
------------ ------------ ------------ ------------
Cash and cash
equivalents 149,626 154,240 134,699 85,533
Investment securities
available-for-sale, at
fair value 219,931 220,196 203,290 226,625
Investment securities
held-to-maturity, at
cost 12,984 14,981 15,458 13,965
Loans receivable, net
of deferred fees 660,072 664,308 692,267 713,596
Allowance for loan
losses (12,660) (12,024) (12,185) (12,062)
------------ ------------ ------------ ------------
Net loans 647,412 652,284 680,082 701,534
Loans held for sale 1,620 955 1,509 610
Investment in Federal
Home Loan Bank stock,
at cost 6,188 6,188 6,188 6,188
Bank-owned life
insurance 36,367 36,233 36,604 36,435
Accrued interest
receivable 2,470 2,669 2,528 2,801
Other real estate owned 21,878 23,698 23,347 19,223
Office properties and
equipment 15,293 15,519 15,768 16,225
Net deferred tax assets 12,375 11,032 11,302 16,281
Other assets 5,404 8,373 7,334 6,674
------------ ------------ ------------ ------------
Total assets $ 1,131,548 $ 1,146,368 $ 1,138,109 $ 1,132,094
============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits $ 961,945 $ 974,328 $ 965,791 $ 967,154
Borrowed funds 49,306 49,828 50,562 51,306
Advance payments by
borrowers for taxes
and insurance 4,322 4,542 4,734 4,243
Other liabilities 4,763 4,893 5,200 4,794
------------ ------------ ------------ ------------
Total liabilities 1,020,336 1,033,591 1,026,287 1,027,497
Shareholders' equity:
Preferred stock,
$0.01 par value;
15,000,000 shares
authorized -- -- -- --
Common stock, $0.01
par value;
85,000,000 shares
authorized;
23,423,306 shares
issued; 10,894,112,
10,898,168,
10,874,687, and
10,867,357 shares
outstanding 234 234 234 234
Additional paid-in
capital 187,207 186,975 187,260 187,379
Retained earnings 78,033 78,310 76,914 74,420
Treasury stock, at
cost; 12,529,194,
12,525,138,
12,548,619, and
12,555,949 shares (154,443) (154,411) (154,698) (154,824)
Accumulated other
comprehensive income
(loss), net of tax 181 1,669 2,112 (2,612)
------------ ------------ ------------ ------------
Total shareholders'
equity 111,212 112,777 111,822 104,597
------------ ------------ ------------ ------------
Total liabilities
and
shareholders'
equity $ 1,131,548 $ 1,146,368 $ 1,138,109 $ 1,132,094
============ ============ ============ ============
CFS BANCORP, INC.
Selected Financial Data (Unaudited)
(Dollars in thousands, except per share data)
June 30, March 31, December 31, June 30,
2013 2013 2012 2012
------------- ------------- ------------- -------------
Book value per
share $ 10.21 $ 10.35 $ 10.28 $ 9.62
Shareholders'
equity to total
assets 9.83% 9.84% 9.83% 9.24%
Tier 1 core capital
ratio (Bank only) 9.08 8.92 8.81 8.56
Total risk-based
capital ratio
(Bank only) 15.31 14.86 14.06 13.35
Common shares
outstanding 10,894,112 10,898,168 10,874,687 10,867,357
Employees (FTE) 262 262 261 261
Number of full
service banking
centers 20 20 20 20
Three Months Ended Six Months Ended
--------------------------------- ---------------------
June 30, March 31, June 30, June 30, June 30,
2013 2013 2012 2013 2012
---------- ---------- ---------- ---------- ----------
Average Balance
Data:
Total assets $1,138,547 $1,141,032 $1,162,099 $1,139,996 $1,160,644
Loans receivable,
net of unearned
fees 663,471 676,181 705,410 669,791 707,061
Investment
securities 246,277 229,120 252,698 237,746 255,789
Interest-earning
assets 1,027,146 1,030,232 1,052,039 1,028,681 1,048,907
Deposits 965,033 966,670 996,741 965,961 993,514
Interest-bearing
deposits 852,892 857,838 890,814 855,352 889,728
Non-interest
bearing deposits 112,141 108,832 105,927 110,609 103,786
Interest-bearing
liabilities 902,564 908,356 941,398 905,445 941,599
Shareholders'
equity 113,019 112,143 103,827 112,583 104,052
Performance Ratios
(annualized):
Return on average
assets (.06)% .53% .47% .24% .32%
Return on average
equity (.59) 5.43 5.25 2.39 3.56
Average yield on
interest-earning
assets 3.65 3.71 4.03 3.68 4.05
Average cost of
interest-bearing
liabilities .50 .54 .68 .52 .70
Interest rate
spread 3.15 3.17 3.35 3.16 3.35
Net interest
margin 3.21 3.23 3.42 3.22 3.43
Non-interest
expense to
average assets 3.33 3.01 2.96 3.17 3.25
Efficiency ratio
(1) 96.11 77.78 75.71 86.49 82.92
Cash dividends
declared per share $ .01 $ .01 $ -- $ .02 $ .01
Market price per
share of common
stock for the
period ended:
Close $ 10.72 $ 7.99 $ 4.98 $ 10.72 $ 4.98
High 10.95 8.07 5.96 10.95 6.29
Low 8.05 6.18 4.30 6.18 4.30
(1) The efficiency ratio is calculated by dividing non-interest expense by
the sum of net interest income and non-interest income, excluding net
gain on sales of investment securities.
CFS BANCORP, INC.
Reconciliation of Income Before Income Taxes to Pre-Tax, Pre-Provision
Earnings, as adjusted
(Unaudited)
(Dollars in thousands)
Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2013 2013 2012
----------- ----------- -----------
Income (loss) before income taxes $ (501) $ 2,090 $ 1,895
Provision for loan losses 1,076 510 1,150
----------- ----------- -----------
Pre-tax, pre-provision earnings 575 2,600 3,045
Add back (subtract):
Net gain on sale of investment
securities (192) (184) (305)
Net (gain) loss on sale of other
real estate owned 542 (10) (86)
Merger-related expenses 971 -- --
Other real estate owned related
expense, net 114 250 316
Loan collection expense 248 133 119
Severance and retirement
compensation expense -- -- --
----------- ----------- -----------
Pre-tax, pre-provision earnings, as
adjusted $ 2,258 $ 2,789 $ 3,089
=========== =========== ===========
Pre-tax, pre-provision earnings, as
adjusted, to average assets
(annualized) .80% .99% 1.07%
=========== =========== ===========
Six Months Ended
------------------------
June 30, June 30,
2013 2012
----------- -----------
Income (loss) before income taxes $ 1,589 $ 2,385
Provision for loan losses 1,586 2,200
----------- -----------
Pre-tax, pre-provision earnings 3,175 4,585
Add back (subtract):
Net gain on sale of investment
securities (376) (723)
Net (gain) loss on sale of other
real estate owned 532 (39)
Merger-related expenses 971 --
Other real estate owned related
expense, net 364 934
Loan collection expense 381 237
Severance and retirement
compensation expense -- 876
----------- -----------
Pre-tax, pre-provision earnings, as
adjusted $ 5,047 $ 5,870
=========== ===========
Pre-tax, pre-provision earnings, as
adjusted, to average assets .89% 1.02%
=========== ===========
Our accounting and reporting policies conform to U.S. generally accepted accounting principles (GAAP) and general practice within the banking industry. We use certain non-GAAP financial measures to evaluate our financial performance and have provided the non-GAAP financial measures of pre-tax, pre-provision earnings, as adjusted, and pre-tax, pre-provision earnings, as adjusted, to average assets. In these non-GAAP financial measures, the provision for loan losses, other real estate owned related income and expense, loan collection expense, and certain other items, such as gains and losses on sales of investment securities and other real estate owned and severance and retirement compensation expenses, are excluded. We believe that these measures are useful because they provide a more comparable basis for evaluating financial performance excluding certain credit-related costs and other non-recurring items period to period and allows management and others to assess our ability to generate pre-tax earnings to cover our provision for loan losses and other credit-related costs. Although these non-GAAP financial measures are intended to enhance investors' understanding of our business performance, these operating measures should not be considered as an alternative to GAAP.
CONTACT: Daryl D. Pomranke President and Chief Executive Officer 219-513-5150 Jerry A. Weberling Executive Vice President and CFO 219-513-5103
1 Year Cfs Bancorp, Inc. (MM) Chart |
1 Month Cfs Bancorp, Inc. (MM) Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
